Tony Zhang's Southwest Airlines Options Trade

Loading...
Loading...

On CNBC's "Options Action," Tony Zhang spoke about a potential move higher in Southwest Airlines Co LUV. He said the stock has been underperforming since April, but it's now touching its major bullish trendline and looks to him it's ready to bounce.

Southwest Airlines is the only one of the major airlines that is adding capacity in the second half. Others are slashing capacity because of labor constraints. Zhang likes the stock a lot, going into earnings, which are due in about two weeks.

To make a bullish bet, Zhang wants to buy the September $52.50 call for $3 and sell the July $56 call for 60 cents. He is paying $2.40 for a $3.50 wide calendar call spread, risking around 4.5% of the underlying price.

Market News and Data brought to you by Benzinga APIs
Date of Trade
ticker
Put/Call
Strike Price
DTE
Sentiment
Posted In: OptionsMarketsMediaTrading IdeasCNBCOptions ActionTony Zhang
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...